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What is the net present value of dropping the department

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Question - X Company is planning to drop a department that has shown a $10,000 loss in each of the last 3 years. If the department is dropped, three things will happen: 1) the annual loss will be avoided, 2) some equipment will be sold immediately for $19,000, 3} sales of another product will be increased, contributing $1,000 to annual profits. Assuming 6 year time horizon and a discount rate of 4%, what is the net present value of dropping the department?

Reference no: EM131732170

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